Archive for May, 2011

The climbing cost of healthcare has been among the top issues in this year’s elections, and it should be on your list of concerns too, because within the healthcare industry lies an immensely untapped potential for financing that is in dire need of your cash flow expertise. Allow me to explain the situation and then show you where you fit into the healthcare financial equation.

According to the Agency for Healthcare Research and Quality’s Web site, the United States spends a larger portion of its gross domestic product (GDP) on healthcare (nearly one-seventh) than any other major industrialized country, and it has been one of the fastest growing areas within the federal budget for the past several years. In other words, a large portion of all U.S. economic expenditures (14 percent or $1.2 trillion) is spent on providing healthcare to Americans. On the surface, this appears to be a good thing because if more money is budgeted for healthcare, then more people can benefit from it. Yet there’s an underlying irony’an increasing number of healthcare providers continue to operate in the red. In fact, according to the American Hospital Association, one-third of America’s 5,000-plus hospitals are actually losing money, while another one-third is barely breaking even.

So who’s to blame for this financial crisis? Most would assume that healthcare institutions are the ones to blame. It is easy to jump to the conclusion that the institutions are abusing the system and that they are not using their allotted sums appropriately. However, in reality there are a number of culprits on the playing field, and only one of them is healthcare institutions. An aging population, an increasing number of uninsured Americans and slow-paying government aid programs all play a part in cramping the budgets of hospitals, physicians, employers and consumers.

Over the past 50 years, our nation’s population has aged significantly. The Baby Boomers are quickly approaching their 65th birthdays, which will place them in the oldest adult segment of the American population. (In fact, the U.S. Census Bureau projects that over 20 percent of the American population will be included in the oldest segment by 2050). According to The 2003 Chartbook on Trends in the Health of Americans, the surge in elderly adults will place tremendous stress on America’s healthcare system during the 21st century, because additional services will be necessary to treat and manage their chronic and acute health conditions. Not to mention there will be over 40 million retired elderly adults depending solely on Medicare to cover their medical bills next year, a problem that I will delve into later in the article.

In addition to the ‘baby boom’ generation getting older, our younger generation has received the short end of the stick when it comes to healthcare coverage. Medicaid usage and the percent of uninsured Americans has been on the rise since 1984. The 2003 Chartbook on Trends in the Health of Americans reported that in 2001, adults aged 18-24 were most likely to lack health insurance coverage (16 percent went without for the year) and those 55-64 were least likely. In addition, the Denver Post reported that the number of uninsured young adults aged 25-34 ‘jumped dramatically’ during 2003, from 9.8 million to 10.3 million. Rising health insurance premiums and overall poverty rates have both contributed to the 45 million Americans who went uninsured last year, as reported by The New York Times.

For example, expensive healthcare premiums make it harder for employers to afford coverage for their employees, creating an uninsured working class. According to the Washington Post, the proportion of the working class who received health insurance through their employers fell to 60.4 percent in 2003, (down from 61.3 percent in 2002,) the lowest level in a decade. Within that uninsured working class, 20.6 million people were full-time employees. Add in the fact that emergency rooms are obligated to care for any patient that comes through their doors, regardless of whether they have insurance or not, and what do you get? Answer: Millions of uninsured people who visit the emergency room to receive medical attention and who also rely on the hospital to foot the bill.

To make matters worse, the U.S Census Bureau reports that poverty rates have been steadily increasing over the past few years (12.3 percent in 2002, translating to 34.6 million people, see figure 1), forcing a majority of the less fortunate population to either go uninsured or rely on Medicaid to pay their medical bills. Neither option is a promising solution to the healthcare cash crunch equation because the facilities cannot count on being recompensed directly and adequately for their obligated medical actions. Hence, the increase in uninsured Americans and those who rely solely on Medicaid and Medicare has had a tremendous affect on the United States’ healthcare institutions.

Title XIX of the Social Security Act, commonly known as the Medicaid program, is the largest source of funding for medical and health-related services for America’s poorest people. However, since its launch in 1965, Medicaid’s costs have rapidly increased, paying an average of $3,935 per person to healthcare vendors in 2000, as reported by The Official U.S. Government Site for People with Medicare (www.medicare.gov). On the other hand, the Medicare program was created in 1965 under title XVIII of the Social Security Act. Designed to provide basic hospital and medical coverage for adults aged 65 and above who are no longer working and therefore are unable to pay for healthcare, Medicare’s costs has also increased rapidly, and it currently covers 41 million Americans.

Although Medicaid and Medicare programs can be beneficial for underprivileged and elderly Americans in need of healthcare, American medical institutions and their vendors don’t fare quite as well in this cash crunch equation due to sluggish and inadequate payments from the above federal programs.

Because each state has its own unique way of filing for government healthcare coverage and because of capped expense amounts, federal insurance plans like Medicaid and Medicare make their payments slowly, sometimes taking months to deliver funds and in many cases, the government-mandated payments don’t cover the actual cost of providing care. Accordingly, healthcare institutions such as hospitals and nursing homes take a longer time to pay their own invoices. As a result of their inadequate financial resources, these hospitals and nursing homes suffer from dwindling human and technological resources. So in an effort to save money, facilities are forced to make cuts in staffing and special treatment programs, pass on costly technological advances and start outsourcing more general positions, which creates a whole new world of vendors who sell to hospitals and nursing homes. (Think: janitorial services, cafeteria workers, temporary nurse staffing agencies, medical staffing and medical transcriptionists, to name a few.)

Here is where you enter the equation. As cash flow consultants, it is your mission to ‘make the cash flow’ in companies, is it not? You take it upon yourself to find businesses needing funds, and then you match the client with a company who can supply them with adequate working capital. When searching for funding, it is imperative that you understand your client’s business, and it is equally as important for the actual company providing the funds to understand your client’s business. A bond is made between you, your client and the funding company, which means that all parties involved need to be familiar with the others’ intentions and wishes going into the deal in order to make the best financial arrangement. But with so many different types of funding to choose from, vendors look to you to help them sift through the information, which makes it even more critical for you to understand your client’s business and their specific funding needs. This can be challenging when working exclusively with vendors serving healthcare institutions because it is such a specialized industry, filled with unique working opportunities, complicated lingo and elaborate payment methods.

So let’s revisit that cash crunch equation once again. Healthcare institutions need money to help patients, increase technology and pay their vendors. But because it sometimes takes months for hospitals and nursing homes to be paid for their services, they are forced to take additional months to pay their own vendors for their services. In the meantime, those vendors suffer because they can’t make payroll or pay taxes. So they reach out to consultants like you to help them find a way to stabilize their cash flow. Lucky for you, you understand their frustrations with the healthcare financial crisis (on account of this article), and you are fully capable of setting up a deal with a funding company who also understands the healthcare industry. And thus, the cash crunch equation is solved thanks to you.

Want to learn how you can help even more? Stay tuned for the next blog post, which will go into further detail about the financing options that are available to these vendors, and find out which one holds the missing piece to the healthcare cash crunch puzzle.

NOTE: The Cash Poor Series was initially written as a three-part series written by Nikki Flores for the American Cash Flow Journal, which is no longer in publication. It was also published on PRN Funding’s web site.

However, many of those rumors are a result of misinformation and poor staffing factoring research methods.

This article will help debunk some of the more common factoring myths so that staffing business owners can make an educated decision when it comes time to finding the appropriate funding solution for their cash flow problems.

Healthcare Staffing Factoring Myth #1: I’m nervous to factor my healthcare staffing invoices because my customers are not familiar with it.
Reality: Factoring has been around for over 4,000 years. In fact, many big name companies have benefited from it, including: 3M Corporation, Best Buy, American Express Company, Motorola Inc., CVS Corporation, and Foot Locker. In addition, factoring is very prominent in the world of staffing because medical facilities routinely take weeks or months to pay their staffing vendors. In most cases, in order for a staffing business owner to utilize a factoring company, the accounts payable clerk who handles the payables just needs to change the remittance address.

Healthcare Staffing Factoring Myth #2: Invoice Funding is an expensive financing option.
Reality: It’s important to consider the fact that a factoring fee is not the same thing as an annualized interest rate. For example, if a factoring firm charges a staffing agency owner 3% per month, it cannot simply be translated into 36% APR. Rather, a factoring firm’s fees stop the day an invoice is paid. Staffing firms do not typically wait 12 months to receive payment on an invoice, so the fee is not nearly as large as one would perceive it to be.

Healthcare Staffing Factoring Myth #3: Factoring requires a long-term commitment.
Reality: Unlike a bank loan, most factoring companies who work with staffing agencies do not require a fixed-term financing commitment. You choose when, who, how much and how long to factor your invoices.

Healthcare Staffing Factoring Myth #4:With factoring, I will lose control over my accounts.Reality: Selling staffing invoices makes it easy for business owners to manage their invoices. Most factoring firms offer their clients access to financial reports weekly or daily. In fact, there are many factors who grant access to a secure online reporting system where staffing entrepreneurs can review purchased accounts and collections in real time via a secure Internet connection.

Healthcare Staffing Factoring Myth #5: The hospitals and nursing homes will think my agency has cash flow problems.
Reality: There are many businesses who use factoring and many medical facilities are already familiar with healthcare staffing factoring. Once alerted of the change in remittance address, healthcare facilities simply view the factor as the agency’s new accounts receivable department.

Healthcare Staffing Factoring Myth #6: The hospitals and nursing homes where I staff will be bothered by frequent collection calls.
Reality: A factoring firm will initially contact an agency’s customer to verify that the invoices are valid. If there is a problem and the staffing factor cannot successfully collect on the invoices, the factor will contact the agency owner to discuss the issue.

Healthcare Staffing Factoring Myth #7: The staffing business model is too complicated for a factoring firm to understand.
Reality: There are many accounts receivable factoring firms that are familiar with this intricacies involved with the staffing industry. As a result of their industry expertise, these factoring firms have specialized funding programs specifically geared towards staffing agencies.

Certainly, reviewing these seven common myths will help staffing agency owners who are trying to piece together the facts about invoice factoring. Hopefully, this article has proven that there are two-sides to every story. You can learn more about managing factoring fears, all it takes is a little research to get started!

For the most part, recourse factoring is the most common and the most affordable nurse staffing financial help available to nurse staffing business owners. In this type of factoring arrangements, the nurse staffing accounts receivable factoring company will require an agency owner to buy an invoice back if the client does not pay within a specified amount of time. Moreover, the nurse staffing agency owner accepts full credit risk for any and all accounts receivables that it sells to the factoring company.

What is nurse staffing non-recourse factoring?
The other accounts receivable factoring option that owners have is non-recourse factoring. In a nutshell, non-recourse nurse staffing financing agreements hold the factor entirely responsible for an unpaid invoices if the following is true:

If the hospital, nursing home or vendor management system (VMS) goes bankrupt during the time an agency owner’s invoice was factored.

If the hospital, nursing home or VMS goes out of business during the time an agency owner’s invoice was factored.

It’s important to keep in mind that non-recourse accounts receivable factoring does not cover the following situations:

Very late payments when there is no insolvency

Disputes/challenges with nurse staffing services

General collections issues

Naturally, both options have pros and cons that an owner should consider before choosing which type of agreement to make. Typically, they will receive lower factoring fees and/or higher advance rates if they choose to enter into a recourse factoring relationship. On the other hand, a non-recourse accounts receivable factoring arrangement buys nurse staffing business owners’ protection if a hospital nursing home or VMS goes bankrupt. Ultimately, agency owners need to review their accounts receivable factoring contract in detail with a lawyer to determine which type of arrangement, recourse or non-recourse, is the best fit for their agency.

In fact, there are many companies (i.e. respiratory therapist staffing agencies, radiology tech staffing firms, and physical therapist staffing agencies) that can greatly benefit from all that allied health staffing factoring has to offer. Namely, growing their companies without having to worry about how long it will take for their customers to pay them.

The customer (i.e. hospital, medical clinic, nursing home, etc.) approaches an allied health staffing company to fill an open shift.

If it’s a new customer, the factoring firm performs a credit check on the medical facility and if approved, determines a line of credit for that customer.

The staffing firm provides the medical facility with a temporary employee to fill the shift.

The agency issues an invoice to the medical facility for the shift, making sure to include the factoring firm’s remittance information directly on the invoice.

At any time after the invoice has been issued, the allied health company submits a schedule of accounts receivable for purchase to the factoring firm. In addition to the invoice, this schedule also includes any supporting documentation (i.e. signed time-sheets).

The invoice funding company will contact the staffing agency’s customers from time to time to verify that they are actively using temporary employees from the agency. Upon verification of the invoices, the factor will electronically advance funds within hours.

Per the remittance information included on the factored invoice, the medical facility sends payments directly to the factoring firm’s lock box.

Upon receipt of the payment, the factor remits the difference (reserve) between the collected amount and the advance to the agency, less the discount fee.

Selling invoices to a factor improves the agency’s cash flow, allowing business owners to meet payroll, taxes and other monetary obligations in a timely manner. Thanks to this article, allied health staffing business owners are able to easily familiarize themselves with the factoring process. The next step in improving their cash flow is to start researching which allied health staffing factoring firm will best meet their company’s cash flow needs.

When a medical coding service is considering selling their receivables to a factoring firm, it’s important to familiarize themselves with some common medical coding factoring terminology. This is a quick reference guide outlining some of the more commonly-used factoring terms to help medical coding business owners navigate seamlessly throughout the entire factoring process.

ACH (Automatic Clearing House) – One method factoring companies use to electronically transfer funds into an Account Creditor’s account. When an ACH is initiated, the funds are made available electronically in the Account Creditor’s account on the next business day.

Accounts Receivable – The money that is owed to an Account Creditor for the services it has provided to customers on credit. The amount indicated on an issued invoice.

Advance Rate – Money provided immediately to the Account Creditor-expressed as a percentage of the total invoice amount. Frequently, factoring firms advance between 70-90% of the invoices it buys.

Account Debtor – The purchaser of medical coding services who is responsible for paying the invoice, (a.k.a. your customer.)

Cash Flow – The measurement of cash coming into a company via accounts receivables and cash going out of a company via accounts payable and payroll.

Collateral – An asset that is promised or given to a funder to guarantee the discharge of an obligation by the Account Debtor.

Discount Fee – A fee assessed by a factor that purchases accounts receivable. Traditionally, the discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer.

Face Amount or Face Value – The total amount of an invoice.

Medical Coding Factor – A company that provides operating capital to businesses through the purchase of their invoices.

Medical Coding Factoring – An alternative financing arrangement, in which a factor purchases the accounts receivables of a company, advances a specific percentage of the invoice immediately and then collects on those invoices.

Medical Coding Invoice – A legal debt instrument which indicates the amount due from a customer to pay for delivered medical coding services.

Non-Recourse – The period of time in which the accounts purchased by the factor remain the factor’s accounts and do not revert to the Account Creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.

Notification – The process whereby the factoring company communicates to an Account Debtor that an invoice has been purchased from the Account Creditor and that the Account Debtor is to pay the factoring company directly.

Recourse – The period of time in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.

Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount. (Advance Rate + Reserve = 100% of Total Invoice)

Reserve Release – The Reserve, minus the discount fee, is transferred by the factor to the client after payment is received.

UCC-1 – The financing statement (Form UCC1) filed to perfect a security interest in named collateral.

Keeping this medical coding invoice funding terminology guide close by during conversations with factoring firms will help medical coding business owners better be able to speak and understand the “factoring language.” Using this article as a reference also allows medical coding business owners to save time by focusing on asking the right kinds of questions to locate the best medical coding factoring firm for their company.

In an effort to combat the affects of the crumbling economy, service-oriented businesses have been getting creative with new ways to generate money.

Unfortunately for consumers, that creativity often translates into price hikes, additional fees, reduced services or cut backs on productivity. But does it have to be that way?

Take a look at the airline industry. When fuel prices soared last summer, airline giants started charging extra for what were once common courtesy services in addition to the original ticket price. They started with charging for snacks and drinks and then quickly moved onto charging checked bag fees, assigned seat fees, fuel surcharges, curbside check-in fees, etc.

Once the industry giants established that this additional fee policy was going to be part of the standard flight-booking procedures, it didn’t take long for all of the airlines to jump on the “Hidden Fee Bandwagon.” From a customer’s perspective, it seemed as though the airline industry as a whole started seeing dollar signs instead of thinking about its customers needs. Then along came Southwest Airlines with its clear thinking and its “No Fee Policy.”

In some ways, the accounts receivable factoring industry can appear to be a lot like the airlines industry. Both operate world-wide, both industries should be service-oriented, and both industries are notorious for tacking on extra fees in addition to the basic fee. Much like Southwest Airlines, the factoring industry has a handful of healthcare factoring companies who do not charge extra fees in addition to the base fee. This article will discuss three areas where factoring firms might insert hidden fees.

First and foremost, a business owner needs to understand the basics of how a factor charges for its factoring services. It’s important to note that healthcare factoring firms do not loan money; rather, they purchase a company’s invoices at a discounted rate. This discount rate can be a one-time flat fee, or it can vary depending on how long the factor owns the invoice.

In general, discount rates can be affected by a number of things, including the contractual commitment, the average monthly purchase volumes, the average size of the invoices sold, the number of account debtors (customers) that will be factored and the credit quality of those debtors. Variations in each of these will lead to potentially substantial changes in the fee structure. In many cases, factoring firms will have extra fees in addition to their factoring discount fee. More often than not, these “hidden fees” are disguised as set-up fees, administrative fees and penalty fees.

Set-up Fees
There are some factoring companies that start charging fees as soon as a potential client applies for healthcare factoring services. Set-up fees range from a minimal application fee of $25 to a hefty origination fee of $500. In some cases, factors will add in individual fees for due diligence procedures (i.e. running credit and background checks) and legal documentation fees (i.e. assembling legal documents and filing liens). When all is said and done, a new factoring prospect could be $1,000 out of pocket before knowing if he/she has been approved for funding.

When business owners are comparing and contrasting factoring companies, it’s important to inquire whether the factor charges specific set-up fees. Sometimes, the factor will say yes, and sometimes it will say no. It’s up to the business owner to decide whether or not the factoring services outweigh the start-up costs before moving forward.

Administrative Fees
In addition to application, origination and due diligence fees, some factoring firms charge their clients for the time it takes to compile and ship legal documents, billing for postage, long-distance phone calls, photocopying documents and/or time spent on the computer while assisting their clients. There are also fees associated with funding procedures. Most factors will institute set prices for a same-day wire or an overnight transfer of funds.

When a business owner is contemplating the notion of factoring his/her receivables, it’s important to factor any administrative costs into the equation. Without doing so, a business owner could wind up paying a lot more than he/she had initially anticipated.

Penalty Fees
The last way a factoring firm could potentially squeeze in some additional “hidden fees” is when it assigns fees for various “penalties.” Under this umbrella of penalty fees, a factoring firm could designate fees for misdirected payments, early termination of a contract, aged invoices, expedited funding (within 24 hours or less), not hitting a monthly minimum factoring requirement or going over the maximum allowable factoring amount. In addition, a healthcare factoring firm could also penalize its client by holding onto the funds within the reserve account (cash that is owed back to the client once payments have been received).

When choosing an accounts receivable factoring company, business owners should take the time to read all of the terms and conditions before signing on the dotted line. Entrepreneurs should not be afraid to dig deep into the factoring contract and ask a question when something is unclear. Otherwise, those hidden fees hidden fees will reveal themselves at a point where it’s too late to re-negotiate the terms.

So in conclusion, it does appear that the factoring industry is similar to the airlines industry in that players in both are notorious for charging “extra fees.” The plus side to this realization, however, is that both industries also have some players who stand firm in their “No Extra Fee Policy.” The bottom line-much like when shopping for the best airline deal, it’s extremely important to look at the all-inclusive price, including possibly extra fees, before agreeing to do business with an accounts receivable factoring company.

Awhile back, the owner of PRN Funding, LLC, Philip Cohen, was interviewed and featured on Factoring Investor’s web site. Check out a portion of the interview below:

Factoring account receivables is helping health care companies through these tough economic conditions opening the door to earning opportunities for cash flow consultants. FactoringInvestor (FI) caught up with Phil Cohen, Founder and President of PRN Funding, LLC, to fill us in on the specialized niche of healthcare funding.

PRN: Prior to founding PRN Funding, LLC, I spent the better part of a decade acquiring medical transcription firms as a national roll-up strategy. During this time, I noticed a trend. Many of the medical transcription services were well-run firms; however, they were selling their companies because of cash flow problems. Seeing this cash flow problem, I was able to identify an opportunity to help them – accounts receivable factoring. Over time, I’ve been able to expand into other healthcare vendor niches, including medical staffing, medical coding, medical billing and medical supplies.

FI: What unique benefits does your company provide?

Industry Expertise: PRN Funding, LLC understands the unique characteristics of the healthcare vendor industry. We are very familiar with traditional payment terms, industry jargon and day-to-day procedures associated with the healthcare vendor industry.

Extreme Flexibility: PRN Funding offers the utmost in flexibility to vendors who sell goods or provide services to healthcare facilities. Our clients choose when, who, how much and how long to factor their invoices.

PRN: We pay our brokers 10% of the fees we make for the life of the deal.

FI: What advice would you give to new professionals just starting out in the industry?

PRN: Now is a great time to get into the cash flow industry. Traditionally, small business owners relied heavily on credit cards to fund their business operations when they were not eligible for bank financing. The current economic situation has recently prompted many credit card companies to drastically reduce credit lines and raise interest rates for their customers who use small business credit cards. As a result, these business owners are in desperate need of a new alternative financing method to fund their business, and cash flow consultants have all of the tools to match those business owners with the appropriate funder.

FI: What is the most common business mistake you see people make?

PRN: The most common business mistake I see brokers make is that they present a lead to us without pre-qualifying it beforehand. It’s important for a broker to accurately assess a prospect’s need for funding and then match it with a funder who understands the prospect’s business model.

FI: Given the current economy, have you made any changes in the way you transact business?

PRN: In light of the changing economic climate, PRN Funding made the decision to branch out into a brand new healthcare funding niche. We formally launched PRN Funding’s home care factoring program in February. We recognized how long it takes for state-funded programs to pay private duty agencies, and we wanted to address the dilemma by offering these companies a factoring solution.

In addition, although there are more business owners applying for factoring as a result of the economic crisis, the quality of some of those applicants has gone down. Therefore, PRN Funding has had to tighten up on our due diligence process. Things that we may have been lenient on in the past, we are no longer able to do so…

Because of their lack of financial sophistication and size, today’s small businesses continue to face the hardships brought on by current economic challenges. Many firms struggle to maintain their bank credit facilities, and securing a new line of credit or increasing a company’s current limit is nearly impossible. So if the lending wells have dried up, what’s a small business owner to do? Capitalize on the benefits of accounts receivables factoring.

Once a small business owner has been approved by an accounts receivable factoring firm, the basic invoice factoring process is as follows:

A small business owner’s customer requests goods or services from the company.

If it’s a new customer, the business owner should request a credit check and approval by the invoice factoring firm. Once approved, the company completes the service or delivers the goods.

The business owner issues an invoice, reminding the customer that their receivable has been sold to and will be collected by the factoring firm.

The business owner submits a schedule of accounts for purchase to the factor, including the supporting documentation (purchase orders, invoices, time-sheets, etc.).

Upon verification of invoices for pre-approved customers, the A/R factor will advance funds within hours.

The factoring firm provides all accounts receivable and collections services as required.

In most cases, the customer makes payment(s) directly to the factoring company’s lock box.

Upon receipt of the payment, the invoice factor remits the difference (reserve) between the collected amount and the advance, less the discount fee.

It’s easy to get things started. In most cases, the owner needs only to complete a brief application and present a current accounts receivables aging report to begin the process.

As if a quick approval process wasn’t good enough (banks can take months to approve a loan), there are numerous additional reasons why factoring invoices is an attractive alternative financing option for small and medium-sized businesses-the first being that entrepreneurs with less-than-perfect credit can qualify for financing based on their customers’ creditworthiness. This is simply not the case when looking for a bank loan. Traditional lenders review the applicant’s financial strength in combination with the company’s operating history before they are willing to extend credit.

Furthermore, healthcare invoice funding also gives business owners the ability to offer credit terms to their customers. Especially in today’s economy, customers appreciate the value of having a 30-day grace period to make a payment. Because a business owner receives up to ninety percent of the invoice upfront each time he/she factors, their cash flow remains unaffected by the net-30 terms.

Additionally, accounts receivable factoring helps owners build their company’s credit. Once an entrepreneur begins healthcare factoring and has adequate cash flow, he/she is able to pay vendors on time, establishing a good credit history with them. This makes it so much easier for business owners to get credit from other vendors and increases their chances of borrowing from bank in the future.

All in all, invoice funding instantaneously relieves business owners from many of the stresses involved with managing working capital. The ongoing factoring process is straightforward and easily adaptable. Accounts receivable factoring gives small business owners the ability to control their company’s cash flow as the business grows, while simultaneously improving their creditability.